Important Points to Know about Gold Monetization Scheme

    Important Points to Know about Gold Monetization Scheme
    Important Points to Know about Gold Monetization Scheme:
    Important points that we have to know about Gold Monetization Scheme was given here, which will be more helpful for the candidates those who are preparing for the upcoming exams.

    Gold Monetization Scheme:
    1). The Union Finance MinisterArun Jaitley announced several steps for monetizing gold in theBudget 2015-16 speech, one of them beingGold Monetization Scheme (GMS)

    2).As per the Budget speech the stocks of gold in India were estimated to be over20,000 tonnes but most of this gold is neither traded nor monetized

    3).The Gold Monetization Scheme will replace the already existingGold DepositandGold Metal Loan Schemes

    4).Objectives of the Gold Monetization Scheme are as follows
    ·        To mobilize the gold held by households and institutions in the country
    ·        To provide a push up to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks
    ·        To be able to reduce the dependency on import of gold over time to meet the domestic demand

    5).Features of GMS are as follows
    ·        It facilitates the depositors of gold to earn interest on their metal accounts
    ·        Once the gold is deposited in metal account, it will start earning interest on the same
    ·        The banks would also be able to monetize the gold under this scheme

    6). When a customer takes gold to deposit in a specified bank or agency the purity of the gold is determined by apreliminary test which includes melting the gold and checking with the consent of the customer

    7). Apreliminary XRF machine test is also conducted to tell the customer the approximate amount of pure gold

    8). If the customer agrees then he will have to fill aKnow Your Customer (KYC) form to allow the melting of gold

    9). Afire array test will be conducted and the gold will be meltedin the presence of the customerto remove dirt or studs in the gold

    10).The removed dirt or studs will be handed over to the customer and the purity of the gold will be informed. After which the customer will be givena choiceif he/she is willing to deposit the gold or take it back

    11). If the customer is willing to deposit the gold in the metal account then he/she will be given acertificateby theCollection Center certifying the amount and purity of the deposited gold

    12).The minimum quantity of gold that can be deposited by a customer is set as30gmsto encourage even small depositors

    13).The deposited gold will lent by the banks to jewelers at an interest rate littlehigher than the interestpaid to the customers

    14).Both the principal and interest to be paid to the depositors of gold will bevalued in gold

    15).The tenure of gold deposits is likely to be for a minimum of1 year. The customers will have a choice to take cash or gold on redemption as per the preference stated at thetime of deposit
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